Insured

The Insured is the person whose life, health, or property is covered by the insurance policy.

The insurance contract exists to provide financial protection to the insured in the event of a specified loss — death (in life insurance), medical expenses (in health insurance), or damage to property (in motor or home insurance). The insured is the person covered by the policy, not necessarily the policyholder. What is an Insured? In a term life insurance policy where a father buys a policy on his own life, he is both the policyholder and the insured. In a family floater health insurance policy where a mother is the primary policyholder covering herself, her husband, and their two children, the mother is the insured for her portion of coverage, the father is an insured for his portion, and the children are insured for theirs — but only the mother holds the policy contract. The insured's age, health, and occupation are the primary factors that determine the premium and the risk covered. For life insurance, the insured's date of birth, gender, smoking status, and medical history are used to assess mortality risk. For health insurance, the insured's current health condition, pre-existing diseases, and family medical history determine the premium and any additional waiting periods. The insured has certain obligations under the policy. They must provide accurate information at the time of application — any material misrepresentation (like hiding a pre-existing disease) can result in the claim being denied and the policy being cancelled. During the policy term, the insured must inform the insurer of any change in occupation, health status, or risky hobbies (like parachuting or motor racing) that could increase the risk. In life insurance, the claim proceeds are paid to the nominee (in case of death of the insured) or to the policyholder (in case of maturity). In health insurance, the claim is paid to the hospital (in case of cashless claims) or to the insured (in case of reimbursement claims after paying the hospital bill out of pocket). The distinction between "policyholder" and "insured" is important for tax purposes under Section 80D of the Income Tax Act. Only the policyholder can claim the premium paid as a deduction under Section 80D — not the insured who is covered under someone else's policy. For instance, if a company provides health insurance to an employee (where the company is the policyholder), the employee cannot claim the premium as a deduction under 80D. Similarly, a father buying a health policy for his major son (where the father is policyholder) cannot claim 80D deduction for the premium paid for the son's coverage.